12.30-1.30pm, Wed 4th May 2016
Seminar Room 515, Level 5, 207 Bouverie Street, Carlton
Professor Guido Erreygers, Professor of Economics University of Antwerp, Belgium
In this paper we explore the extent to which estimates of between-country inequality are sensitive to differences in population weights when using rank-dependent indices of inequality. Not surprisingly, since larger countries count more than smaller countries, changes in the former tend to have bigger effects than changes in the latter.This holds for both univariate and bivariate inequality. In the case of bivariate inequality, however, rank-dependent indices can be extremely sensitive to small changes in the variable which is used for ranking, to the point of indicating trend reversals which do not really exist.The use of bivariate rank-dependent indices may therefore produce misleading results when it comes to the measurement of between-country inequality.